September 2019

This is the 17th in a series of articles summarising monthly news and happenings in Sydney real estate, and more broadly.

Positive territory – for now

Property values continue their slow movement towards recovery this month, according to the monthly housing update by Core Logic, with 8/10ths of a percent value increase nationally (which is the best since Oct. 17), with Sydney values rising 1.6% (Best since Nov 16, but 13% lower since the market peaked).

In the report Tim Lawless notes a slight rate of credit growth, and expresses some concern about whether we are abandoning good sense in regards to our debt levels. He notes that while recent changes in APRA’s banking policies may be helping to ignite a more rapid than expected upturn, there is some concern that a too fast recovery – and taking into consideration the rising unemployment, low wages growth and ‘near record-high’ debt levels – if this trend continues regulators will undoubtedly make changes to keep debt from blossoming out of control and/or ‘encourage spending in other areas’. Core Logic covers this in more detail here. Elizabeth Knight, writing for the Sydney Morning Herald echoes this by noting that runaway housing prices – while great for some – are not the best thing in the current economic climate. The ABC also makes note that a potential ‘debt bomb’ similar to the 2008 GFC may be on the rise, and that this time Australia is in a much more vulnerable position.

Attribution:  CoreLogic

Sustainable Housing

While economic woes slip and slide, global sustainability continues its arduous climb. The Real Estate Conversation reports that the latest international GRESB (Global Real Estate Sustainability Benchmark) results show Australia’s construction industry as up there with the best. As part of the Oceania portion, it is clearly some distance in front of all other segments. Maybe next year we’ll even get a colour on the graph.

However, as a reality check against the national pastime of slapping each other on the back in congratulations for something most of us had nothing to do with, Kate Burke reports for Domain on The Fern building, which is apparently Australia’s first apartment building “certified to Passivhaus standards, a German form of sustainable building design that emphasises airtightness, strong glazing, solar panels and better thermal design.”

Of course, the point here is that this is a German standard of building design – not an Australian one. The Fern has triple glazed doors and window, it is airtight, super-insulated with filtered fresh air that does not require artificial heating or cooling… the list goes on. The list of featured attributes read like a who’s-who of building design deficits in Australian homes. Who has ever heard of triple glazing when even double glazing seems a luxurious fantasy at times.

That unqualified question notwithstanding, the GRESB is still an excellent result for the companies involved, and gives the Australian construction industry a bit of a boost in a otherwise depressing time (cracking high rises, aluminium cladding fiasco, industry downturn – etc.).

At a national level, The Real Estate Conversation also reports there has recently been the HIA Australian GreenSmart Home awards, with the winning entry by Beaumont Concepts impressing the judges, who said:

“The home integrates sustainable design and recycled materials with a close to zero energy efficiency result.”

The home reportedly has no electricity costs for a family of four.


On the other side of the sustainability coin, a University of Sydney and University of Newcastle study at Lake Macquarie has met community opposition in preparing for higher sea levels associated with global warming. People, it seems, are likely to ‘believe’ in climate change until there is an effect that might affect them directly. At that point the head goes straight into the sand. The problem, it seems, was a perceived effect on property values, insurance and building costs for areas at risk of rising water levels. The researchers said,

“We were expecting that given people’s properties were at risk of climate change, that they would support measures being put in place, but it was a bit of a contradiction,” Dr Bowden said. “The economic impact … is much more immediate to them than climate change.”

Food for thought perhaps. What are we willing to sacrifice to leave a world for our descendants?